“Bernanke says rules can curb speculation” –Star Business, Jan.4/10

It appears that Ben Bernanke has had an epiphanic conversion from a believer I the Greenspan doctrine and the Freedman gospel of unregulated markets, to a born again Keynesian. Talk about closing the barn door after all the cows have gone missing.
Using monetary policy to quell speculative excesses or “bubbles” in housing or any other part of the economy is like using a sledge hammer to kill a fly. Increasing interest rates to dampen the housing sector, will also affect the whole economy to the detriment of all.

A better approach would be to tax the housing sector, or the sector targeted. It can be easily eliminated when the sector cools, without hurting the whole economy. But of course, that would be a TAX, and any tax is anathema to the voting public and to the business elite in particular.